S&P: General Motors, Ford require sustained improvement

Standard & Poor's said in a report that General Motors Corp. and Ford Motor Co. have taken increasingly aggressive steps to slash costs in their North American automotive operations, but in addition, sustained improvements in credit quality will require success in a number of other areas.

The agency added that external pressures continue to mount from many directions, including the possibility of continued deterioration in product mix, eroding market share and early signals of a weakening macroeconomic picture.

"We view the automakers' accelerated cost-cutting initiatives as a necessary pre-condition to any sustained improvements in credit quality," S&P credit analyst Robert Schulz said.

"But a successful, multi-year turnaround on the revenue and product side will also be required. In the meantime, performance in North America will remain weak for the foreseeable future."

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